British Gas this week has announced that they are going to cut the price of their standard gas tariff by 5.1 percent – but only once the winter is over!
In an announcement made on the company’s website, British Gas says that 6.8 million households will benefit from the latest energy price cut, saving an average of £31. The price cut will come into effect from 16 March – yes, that’s after the winter period. British Gas have also said that customers on older fixed tariffs can switch to a tariff with the new pricing without charge.
However, this price cut really isn’t much of, well, a price cut. Wholesale energy prices have fallen by a third in the past year-and-a-half, so a proper price cut would be something in the region of 30 percent (or anything close to a third). 5.1 percent is rather paltry, but energy suppliers would tell you that they buy their energy in bulk well in advance, so the current price of energy reflects their original costs. Does that mean that next year, when the energy they purchased at significantly less starts being used, they will cut prices for the consumer?
Don’t hold your breath. As usual, the advice from us is to switch your energy supplier as soon as your tariff is up, if you can get a better deal elsewhere.
Commenting on the announcement, Mark Hodges, CEO, Energy Supply & Services said:
“British Gas was the only major supplier to cut prices twice last year, ensuring customers’ bills were lower through the winter. Today we’re announcing a further reduction to ensure our prices remain market-leading.
“Taken together, our three price reductions will bring the average household’s annual energy bill down by almost £100. British Gas will be cheaper than 95% of the market, for a typical household on a standard dual-fuel tariff. Competitive pricing is the way to retain existing customers and win new business in this hard-fought market.”
You can keep up to date with all 2016 energy price cuts at our article, ‘The energy suppliers cutting energy prices in 2016‘.